Estate of Wanamaker

460 A.2d 824, 314 Pa. Super. 177, 1983 Pa. Super. LEXIS 3129
CourtSuperior Court of Pennsylvania
DecidedMay 20, 1983
Docket389
StatusPublished
Cited by28 cases

This text of 460 A.2d 824 (Estate of Wanamaker) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estate of Wanamaker, 460 A.2d 824, 314 Pa. Super. 177, 1983 Pa. Super. LEXIS 3129 (Pa. Ct. App. 1983).

Opinions

WIEAND, Judge:

The appeal in this case is from a final decree of the Orphans’ Court Division of the Montgomery County Court of Common Pleas which refused to allow attorneys for Christopher G. Kellogg, a beneficiary of the trust estate of Rodman Wanamaker, deceased, to recover counsel fees from a fund created when the estate sold the stock of John Wanamaker, Philadelphia (“J.W.P.”) to Carter Hawley Hale Stores, Inc. (“C.H.H.”) for $60,000,000.00. This price produced, after taxes, a net of approximately $11,000,000.00 more than C.H.H.’s initial offer. The auditing judge found that legal services rendered by Morton P. Rome, Esquire, now deceased, and Edwin P. Rome, Esquire, although valuable to their client, had not contributed to the increased sales price and that their fees, therefore, could not be recovered from the trust estate. We affirm.

The general rule is that each party to adversary litigation is required to pay his or her own counsel fees. Chatham Communications, Inc. v. General Press Corp., 463 Pa. 292, 300, 344 A.2d 837, 842 (1975); Shapiro v. Magaziner, 418 Pa. 278, 280, 210 A.2d 890, 892 (1965); Hempstead v. Meadville Theological School, 286 Pa. 493, 495, 134 A. 103, 103 (1926); Harrison’s Estate, 221 Pa. 508, 70 A. 827 (1908). In the absence of a statute allowing counsel fees, recovery of such fees will be permitted only in exceptional circumstances. One of the exceptional situations in which counsel fees may be recovered is where the work of counsel has created a fund for the benefit of many. See: Wilbur’s Estate, 334 Pa. 45, 72-74, 5 A.2d 325, 339 (1939); Hempstead v. Meadville Theological School, supra. This rule was stated by the Supreme Court of the United States in The Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980), as follows:

[180]*180“[A] litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole____ The common-fund doctrine reflects the traditional practice in courts of equity ... and it stands as a well-recognized exception to the general principle that requires every litigant to bear his own attorney’s fees ____ The doctrine rests on the perception that persons who obtain the benefit of a lawsuit without contributing to its cost are unjustly enriched at the successful litigant’s expense.” (Citations omitted).

Id. at 478, 100 S.Ct. at 749, 62 L.Ed.2d at 681-682. See also: Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3rd Cir.1976).

It is fundamental that an attorney seeking compensation from an estate has the burden of establishing facts which show that he or she is entitled to such compensation. Hempstead v. Meadville Theological School, supra. The allowance or disallowance of counsel fees rests generally in the judgment of the auditing judge, and his or her findings of fact, approved by the court en banc and supported by competent evidence, are binding on appeal. Bennett Estate, 366 Pa. 232, 237, 77 A.2d 607, 609 (1951); Davidson Trust, 354 Pa. 333, 335, 47 A.2d 145, 146 (1946). The judgment of the auditing judge regarding the allowance or disallowance of counsel fees will not be interfered with except for abuse of discretion or, as some cases express it, palpable error. LaRocca Estate, 431 Pa. 542, 548-549, 246 A.2d 337, 340 (1968); Thompson Estate, 426 Pa. 270, 281-282, 232 A.2d 625, 629 (1967); Rambo’s Estate, 327 Pa. 258, 266, 193 A. 1, 4 (1937). Here, the auditing judge found that the services rendered by appellants had not contributed to the creation of the fund against which counsel sought to charge their fees. We turn, then, to a review of the evidence to determine whether the auditing judge committed palpable error.

[181]*181The evidence discloses that on March 7, 1978, at a meeting of trust beneficiaries, the chairman of the trustees reviewed the difficulties being experienced in the retail trade by J.W.P. and reported that C.H.H. had expressed interest in purchasing J.W.P. in exchange for two million shares of common stock of C.H.H. and approximately $12,-628,000.00 in cash. The trial court estimated the value of this offer to be $45,027,551.38. A majority of the beneficiaries expressed a willingness to sell on those terms. However, one of the beneficiaries, Christopher G. Kellogg, was strongly opposed and promptly contacted his attorney, Palmer K. Schreiber, Esquire. It was Schreiber who thereafter engaged Morton P. and Edwin P. Rome to assist him on Kellogg’s behalf. Another beneficiary, also dissatisfied with the amount of the offer, invited Marshall Field and Co., another department store, to make an offer.

On March 15, 1978, the trustees executed a tentative agreement to sell the stock of J.W.P. to C.H.H.; and on April 3, 1978, the trustees filed a petition requesting a hearing to obtain Orphans’ Court approval of the sale.1 On that same day, April 3, 1978, Schreiber threatened the trustees with litigation if they continued their efforts to consummate the sale. Now, other trust beneficiaries also voiced objections to the sale, and at least four meetings between trustees, the trust beneficiaries and the respective counsel for the beneficiaries took place during April. On April 24, 1978, the offer of C.H.H., which by now was aware that interest had also been expressed by Marshall Field, was increased to $52,500,000.00, payable in cash. As a result of informal bidding between the two potential buyers, the C.H.H. offer was ultimately raised to $60,000,-000. 00, payable in cash. All beneficiaries except Kellogg signed consents to such a sale. Subsequently, Morton Rome and Schreiber conceived the idea of obtaining a stock option agreement from C.H.H. On May 1, 1978, the terms of the contract of sale were negotiated and accepted. A [182]*182provision thereof gave the trustees the option of purchasing, on or before December 31, 1978, not more than 500,000 shares of C.H.H.’s common stock at a price of $18.50 per share. In fact, the option was never exercised, and it expired according to its terms.

The activities of Morton P. Rome and Edwin P. Rome, according to the facts found by the auditing judge, included the preparation of a complaint “for filing in the United States District Court for the Eastern District of Pennsylvania, seeking a temporary restraining order, preliminary injunction, and final injunction against the sale of the stock of J.W.P. to C.H.H. based on the alleged violation of federal and state securities law.” (Trial Court’s Opinion, p. 72). The petitioner named in the complaint was not Kellogg, however, and the complaint was never filed. Indeed, the trustees were not even aware that a complaint had been drafted.

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Bluebook (online)
460 A.2d 824, 314 Pa. Super. 177, 1983 Pa. Super. LEXIS 3129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estate-of-wanamaker-pasuperct-1983.